IGO Interactive Annual Report 2019

DIRECTORS’ REPORT—REMUNERATION REPORT 30 JUNE 2019 SECTION 5. PLANNED REMUNERATION CHANGES FOR FY20 The Board and Executive team appreciate the importance of competitive remuneration however also recognise that sustained and enduring performance can only be achieved through a strong culture, an individual’s connection to their team and a clearly defined organisational purpose. This culture underpins our ability to create long-term value for our stakeholders and generate long-term, sustainable returns for our shareholders. In FY20, teams across the Company will continue the structured programs of work in progress to build the culture and capabilities required for the future. The Company will place greater emphasis on talent identification and development of existing employees, along with programs for the identification of world class external talent to build a broader base of opportunities for finding talented people at all levels. In FY20, we will also expand our Graduate Program to build “home grown” capability across a broader range of disciplines beyond traditional pathways, along with growing our Vacation Program to increase the feeder route to the Graduate path. Looking forward, speed of learning and the development of a range of “non-traditional” skills with our people that include emotional intelligence, creativity, cognitive flexibility and critical thinking will be key in the preparation of our people for the future of work. In FY20, we intend to continue to build the IGO culture with work in developing our values, supporting behaviours and an IGO specific leadership model. The Company reviews all remuneration practices annually. As a result of the review conducted in FY19, a number of changes will be implemented for FY20, with effect from 1 July 2019. Completed changes and/or progress towards remuneration objectives will be reported in more detail in the 2020 Remuneration Report, however a summary of the key elements of the proposed FY20 program are provided below: GROUP-WIDE REMUNERATION • Review of group-wide remuneration benchmarking and award of a group-wide CPI increment (or consideration of) for all roles was awarded in August 2019. • No group-wide change in STI or LTI programs or opportunities for FY20. • Further enhancement of the Company’s equity offering to all employees with the expansion of a salary sacrifice share plan to include a Company sponsored one-for-one contribution of up to $5,000 (FY19: $2,500) to encourage all employees to share in ownership of the Company and the connection that drives. • A continued focus on operational rosters to ensure the Company maximises operational productivity while focused on individually flexible work options. KMP TFR • The TFR for the Managing Director will increase by 1.16% from $860,000 to $870,000 to reflect market movement in comparator CEO fixed remuneration. • The TFR for the COO will increase from $530,000 to $560,000. • Other increases in TFR for Executive KMPs are in line with market benchmarking and are structured to ensure that Executive fixed remuneration remains competitive within the comparator and broader industry groups for similar roles (see page 56). REVIEW OF INCENTIVE ARRANGEMENTS Following the completion of the three-year cycle a comprehensive review was completed in FY19 with a decision by the Board to maintain the components of the KMP incentive arrangements currently in place. There was also agreement by the Board to alter the reporting structure of the STI and LTI programs in favour of an increased weighting to the long-term incentive. All other elements of the Company’s Total Reward Program will remain unchanged as they are deemed to be both competitive and appropriate in mobilising the required performance and behaviours for KMP and IGO employees to maximise shareholder value. Prior to the issue of any LTI for FY20, the Board will review and approve the performance conditions and comparator group for the award. Further details of any changes made will be provided in the FY20 Remuneration Report. LONG-TERM INCENTIVE Along with changes to the classification of service rights into the LTIP there will be some minor adjustments in LTI levels for KMP actioned for FY20 (see page 56). All changes to the LTIP are designed to achieve a better balance between the weighting of STIs and LTIs to drive an increased connection between and focus on long-term value creation and retention of the executive team. IGO ANNUAL REPORT 2019 — 55